HEALTH

In the early 1990s, Peru was hit by a cholera epidemic, which
highlighted longstanding health care problems. Review of health
statistics amply illustrates Peru's vulnerability to disease and the
uneven distribution of resources to combat it. The most and the best of
the health facilities were concentrated in metropolitan Lima, followed
by the principal older coastal cities, including Arequipa, and the rest
of the country. The differences among these regions were not trivial.
Whereas Lima had a doctor for every 400 persons on average, and other
coastal areas had a ratio of one doctor for every 2,000, the highland
departments had one doctor for every 12,000 persons. The same levels of difference applied with respect to
hospital beds, nurses, and all the medical specialties.

In the early 1990s, over 25 percent of urban residences and over 90
percent of rural residences lacked basic potable water and sewerage.
Thus, the population has been inevitably exposed to a wide variety of
waterborne diseases. The incidence of disease not surprisingly reflected
the inequities evidenced in the health system: the leading causes of
death by infectious diseases have varied from year to year, but
invariably the principal ones have been respiratory infections,
gastroenteritis, common colds, malaria, tuberculosis, influenza,
measles, chicken pox, and whooping cough. The cholera epidemic, which
began in 1990 and claimed international headlines, ranked well down the
list of causes for death behind these others, which have been endemic
and basically taken for granted. In a typical case, during one year in
Huaylas District, which had a small clinic and often was fortunate
enough to have a doctor in residence, 40 percent of all deaths
registered were children below four years of age, who died because of a
regional influenza epidemic.

Although Peru's infant mortality rate per 1,000 live births dropped
from 130 to 80 over a 26-year period (1965-91), the rate in 1991 was
still over twice the rate of Colombia and four times the rate of Chile.
The mortality rate for children under 5 was also brought down greatly,
from 233 per 1,000 in 1960 to 107 per 1,000 in 1991. Both measures for
1991 still exceeded all the other Latin American countries except
Bolivia and Haiti. The only direct measure of social welfare that
deteriorated was nutrition: calorie consumption per capita fell 5
percent from the average for 1964-66 to 1984-86. In 1988 calorie
consumption was 2,269, as compared with 2,328 in 1987. Because calorie
consumption levels generally parallel income levels, the decrease must
have been concentrated at the level of the extremely poor.

Peru's lack of general well-being was further suggested by the
nation's high and growing dependence on foreign food since 1975 through
direct imports, which had increased 300 percent, and food assistance
programs, which showed a tenfold increment. The United States has been
by far the largest provider of food assistance to Peru through its
multiple programs administered under the Food for Peace (Public Law 480)
projects of the United States Agency for International Development
(AID). During the 1980s, food aid amounted to over 50 percent of all
United States economic assistance. The aid was delivered as maternal and
child health assistance and food-for-work programs administered by CARE
(Cooperative for American Relief), church-related private voluntary
organizations, or by direct sale to the Peruvian government for urban
market resale.

Peru's totally inadequate social security system, operated by the
Peruvian Institute of Social Security (Instituto Peruano de Seguridad
Social--IPSS), did not remain exempt from the Fujimori government's
privatization policy. As a result of two legislative decrees passed in
November 1991, Peru's system for providing social security retirement
and health benefits underwent significant modification. The changes were
similar to those made by the military government of Chile in the early
1980s, when employees were given a choice of either remaining with the
existing system or joining private systems set up on an individual
capitalization basis. The Fujimori government decided to adopt the
Chilean social security model almost completely. The stated objectives
were to permit open market competition, alleviate the government's
financial burden by having it shared by the private sector, improve
coverage and the quality of benefits, and provide wider access to other
social sectors. Private Pension Funds Administrators (Administradoras de
Fondos de Pensiones--AFPs) were expected to begin operating in June
1993. A presidential decree in December 1992 ended the IPSS's monopoly
on pensions. This provided a boost to Peru's small and underdeveloped
capital market by allowing the AFPs to invest in bonds issued by the
government or Central Reserve Bank (Banco Central de Reservas--BCR, also
known as Central Bank) as well as in companies.

The cholera and other health and social issues in Peru were
interrelated closely with the country's steadily worsening environmental
conditions. The high levels of pollution in large sectors of Lima,
Chimbote, and other coastal centers had resulted from uncontrolled
dumping of industrial, automotive, and domestic wastes that had created
a gaseous atmosphere. The loss of irrigated coastal farmland to urban
sprawl, erosion of highland farms, and the clear-cutting of Amazonian
forest all have conspired to impoverish the nation's most valuable
natural resources and further exacerbate social dilemmas. Although Peru
is endowed with perhaps the widest range of resources in South America,
somehow they have never been coherently or effectively utilized to
construct a balanced and progressive society. The irony of Peru's
condition was captured long ago in the characterization of the nation as
being a "pauper sitting on a throne of gold." How to put the
gold in the pauper's pockets without destroying the chair on which to
sit is a puzzle that Peruvians and their international supporters have
yet to solve.